State To Study Process Of Power-plant Bids

July 19, 2002|By Nicole Ostrow Business Writer

State regulators are looking into the process Florida's electric companies use to choose who builds new power plants.

The Florida Public Service Commission is holding a workshop today to discuss the issue, although the power companies, including Miami-based Florida Power & Light Co., say the commission doesn't have the authority to change the process.

No decision will be made today at the workshop. PSC staff will review the testimony and make a recommendation to the commissioners.

Under the current bidding procedure, which was set up in 1994, the electric companies accept proposals from competitors when they need to add power. If a competitor is chosen, a utility like FPL would contract with the company to buy power from a plant the competitor builds. The utility itself would also submit a bid.

Who ultimately wins the bid is decided by the utility that needs the additional power, a process competitors say is biased. But the power companies argue that their decisions are based on what is cost-effective for consumers. And before any project moves forward, the PSC has to give final approval, and the utility has to show that the plan is the best priced.

Since 1994, all of the electric companies' new power projects have been built by state utilities, not competitors, said Richard Tudor, a PSC spokesman, adding that the commission has received several complaints from competitors.

Earlier this year, Reliant Energy Power Generation Inc. filed a complaint with the PSC contending that FPL violated state rules when asking for bids for 1,900 new megawatts of power. FPL wants to add 800 megawatts to its Martin County plant and 1,100 megawatts to its Manatee County plant.

FPL then decided to accept more bids from companies and ultimately decided to build the additions itself, saving consumers $80 million, said company spokesman Bill Swank.

"We think the current rule provides the best opportunity for our customers to receive the lowest cost power," he said.

Still Mike Green, from the Florida Partnership for Affordable Competitive Energy, wants the PSC to change the process to make it more impartial.

"It could be that the FPL power plants are the best for the consumer, but nobody knows that but the judge, and the judge is FPL," Green said.

Nicole Ostrow can be reached at nostrow@sun-sentinel.com or 954-356-4667.